January 19, 2010

LG Loses Attempt to Keep Efficiency Label On Fridges

LG Electronics lost its bid to try and keep "Energy Star" labels on roughly 40,000 of its refrigerators yesterday, when a federal judge refused to enjoin a government order requiring the company to remove the stickers.

The Department of Energy had given LG until Jan. 20 to take off the labels, which the government uses to promote energy efficient products, after it concluded that the company hadn’t properly tested the appliances’ energy use. LG sued in December, arguing that its tests met standards it agreed to with the DOE in 2008. It also said that agreement was the equivalent of an industry-wide rule, and that the government hadn’t followed the appropriate procedures to change it. The company asked for a preliminary injunction allowing it to keep the stickers. The BLT covered the case’s in-court action last week.

In yesterday’s opinion, U.S. District Judge John Bates of the District of Columbia found that the 2008 agreement was not meant to apply to the entire refrigerator industry, and was in fact an exception carved out specifically for LG. He also found the agreement only applied to certain fridges, which were not the ones at issue in the case. He rejected several other arguments by LG as well, including the company’s claim that it needed an injunction because removing the stickers would cause irreparable harm to its reputation.

“Any reputational harm LG will suffer by removing the Energy Star labels from a limited number of units in one line of its refrigerators will be relatively trivial,” Bates wrote.